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FAQs > OPERATIONS > WORKER'S COMPENSATION & UNEMPLOYMENT INSURANCE

At what point does a nonprofit have to contribute to South Carolina's Worker's Compensation and Unemployment Insurance coverage? 
Answered by: Ben Bullock

Nonprofits are not required to contribute to the state unemployment insurance fund, but if you do not, then your organization is liable to completely pay for future unemployment claims. There are some private alternative insurance products available for nonprofits that may be more cost effective. (If you are interested in learning more about those, please email Ben.)

Your State Unemployment Tax Act (SUTA) rate is based on your past unemployment claims, so every employer pays a different rate. There is an initial rate for "new employers", and it is important to make a note of that when filing. Essentially, you pay this rate on each employee's gross salary, until that employee has made $14,000 in the calendar year. In essence, you only pay the tax on the first $14,000 a given employee makes in a calendar year. It does not matter whether they are part time or full time. To determine your specific SUTA rate, call the SC Department of Employment and Workforce (SCDEW).